The Supreme Court's 'Landmark' Patent Ruling Didn't Really Change Much

Supreme Court building
Supreme Court building

Among the most awaited Supreme Court decisions this term was a patent case, Bilski v. Kappos. While patent law is usually esoteric and unlikely to grab headlines, this case addressed the core concept of patents -- namely, what can be patented -- in a way that's particularly important to today's information economy. In the case at hand, the inventors wanted to patent a way of hedging commodities risk that seemed to be essentially an attempt to patent math.

Hanging in the balance was the overarching question: Can business methods and similar intangible inventions be patented? At what point are inventors seeking to patent mere concepts and principles?

The court didn't turn in a blockbuster opinion by upholding the very restrictive "machine or transformation" test created by the Federal Circuit Court of Appeals in this case. Nor did it lay out a new test that clearly defines the field by giving paradigmatic guidance -- however broad -- going forward.

Leaving the Waters Murky

Instead, the court essentially said: "Hey, Federal Circuit, you got the outcome right. The 'invention' in this case didn't qualify for a patent -- it was just math and abstract concepts. But the test you used to reject the patent claim was wrong. However, we're not going to tell you what the right test is, and we're not announcing a definitive new test. In fact, the test you used will be right much of the time, but you can't rely on it exclusively. In short, reread our precedents, and read them more accurately next time."

In short, the high court left the waters murky. That may not be a very satisfying outcome for the many interested parties -- 61 amicus briefs were filed -- but inventors can take heart that it is theoretically possible to get a patent on an invention that doesn't look like the inventions of the Industrial Age. With the great approval the Supreme Court has given the machine or transformation test as a, rather than the, way of determining patentability, however, future cases are likely to find many business methods fail to win patents.

In rejecting the commodities-hedging patent, today's opinion put down an additional marker along the continuum ranging from unpatentable basic concept to true patentable invention. Nonetheless, the opinion notes that prior cases rejecting patentability were further from the basic-concepts end of the continuum. That means today's decision didn't really add much to the prior jurisprudence, other than rejecting the exclusivity of the machine or transformation test. Ho-hum.

Justice Stevens' Swan Song

Although the decision was unanimous in the judgment, like today's gun decision, the reasoning was fractured. Four conservative Justices led by Justice Anthony Kennedy and joined in part by Justice Antonin Scalia delivered the opinion, while the four liberal justices led by Justice John Paul Stevens reached the same result by a different path.

From a purely historical perspective, it's unfortunate that Justice Stevens didn't write for the majority. This was his last day as a sitting Supreme Court Judge (and coincidentally, the first day of Elena Kagan's confirmation hearings), and the decision's common-law nature was classic Stevens, as his concurrence in the judgment (at p. 21) makes clear. Ironically, although Justice Stevens is viewed as the court's most liberal member, in this decision -- as in so many -- his opinion is the most restrained, deciding the least amount necessary to resolve the case.

In sum, for the patent crowd, today's much-anticipated blockbuster was really a straight-to-video flop but also a graceful encore for the retiring Justice Stevens.